Align Technology, Inc. Q1 FY2026 earnings call

• Greetings and welcome to the Align first quarter 2026 earnings call. - Joe Hogan started with an overview of first quarter 2026 results, discussing performance across clear aligners and systems and services segments. - John Marici then walked through financial results and outlook for Q2 in 2026. - First quarter revenues of $1.04 billion, up 6.2% year - over - year, driven by high clear aligner volumes and increased ASPs. - Clear aligner shipments reached a record 686,000 cases, increasing 6.7% year - over - year. - Growth broad - based across customer channels, with DSOs driving global double - digit clear aligner volume growth. - Invisalign demand strong across age groups and geographies, with 449,000 adults treated in Q1, up 7.8% year - over - year, and 237,000 teens and kids started Invisalign treatment, up 4.8% year - over - year. - Systems and services revenues up 1% year - over - year, with continued adoption of Itero Lumina full systems and service revenues. - Exocad delivered double - digit year - over - year revenue growth. - Inaugural Invisalign Advanced Restorative Treatment pilot in EMEA, and began pilot in the US. - Doctor subscription program (DSP) showing strong growth, with DSP touch - up cases growing double - digit year - over - year. - Patient financing programs like HFD in the US and Invisalign Pay in Brazil showing adoption. - Peer - to - peer mentoring programs active across regions. - Treatment planning services (TPS) showing increased adoption among GPs

Clear aligners: Q1 clear aligner revenue was $856 million, increasing 7.4% year - over - year and 2.1% sequentially. Q1 clear aligner volume reached a record 686,000 cases, up 6.7% year - over - year and 1.3% sequentially. On a year - over - year basis, clear aligners revenues reflected double - digit volume growth in EMEA, APAC and Latin America, along with overall stability in North America. Systems and services: Q1 systems and services revenues of $184.1 million were up 0.9% year - over - year, primarily due to favorable foreign exchange, higher scanner systems and sales, and non - system sales, partially offset by lower scanner WAN sales

• Expect Q2 2026 worldwide revenues to be in the range of $1,040,000,000 to $1,060,000,000, up approximately 3% to 5% year - over - year. - Expect Q2 2026 clear aligner volume to be up sequentially and year - over - year, and clear aligner average selling price to be flat sequentially and year - over - year. - Expect systems and services revenues to be up sequentially. - Expect Q2 2026 gap operating margin to be approximately 16.4% and non - gap operating margin to be approximately 21.5%. - For fiscal 2026, expect worldwide revenue growth to be up three to 4% year - over - year. - Expect 2026 clear aligner volume growth to be up mid - single digits year - over - year. - Expect 2026 gap operating margin to be slightly below 18% and approximately 400 basis point improvement over 2025, and non - gap operating margin to be approximately 23.7%, a 100 basis point improvement year - over - year. - Expect investments in capital expenditures for fiscal 2026 to be $125 million to $150 million. - Expect to repurchase an additional $200 million of common stock over a six - month period beginning on or about May 1st, 2026

• Uncertainty and potential adverse impacts on patient traffic, consumer demand, and shipping and freight resulting from ongoing military action in the Middle East. - Potential adverse foreign exchange fluctuation, changes to currently applicable duties, including tariffs, or other fees that could impact the business

Q: Daniel Grosslight with Citi asked about the cadence of profitability for the remainder of the year.

A: John responded that profitability is a reflection of restructuring and other changes, and expects profitability and productivity to continue as the year goes on.

Q: Glenn Santangelo with Barclays asked about Middle East impact, Itero manufacturing, and share purchase timing.

A: John said Middle East impact is in the single digits, Itero had no production/shipment disruption, and share repurchase is part of a disciplined plan.

Q: Brandon Vasquez with William Blair asked about Middle East risks in guidance and resin costs.

A: John said Middle East impact is minimal, and resin costs have minimal direct impact.

Q: John Block with Stifel asked about Q1 and early 2Q trends, and zero refinement contribution.

A: Joe said Q1 was consistent, and zero refinement rollout is a gradual process.

Q: Elizabeth Anderson with Evercore ISI asked about ASP view and margin opportunities.

A: Elizabeth was told ASP has moving pieces but is stable, and margins will improve through productivity and product mix.

Q: Jeff Johnson with Baird asked about North American case growth vs rest of world.

A: Joe said it's likely due to US macro, and John talked about zero AA rollout.

Q: Michael Cherney with Lee Ring Partners asked about OPEX spend and margin upsides.

A: John said they manage OPEX by market and investment.

Q: Jason Bednar with Piper Sandler asked about US market trends and China growth.

A: Joe talked about US market and China team execution.

Q: Steven Valliquette with Mizuho Securities asked about Q2 guidance geography and conversion.

A: Steve was told Q2 growth is consistent, and conversion has returned to normal.

Q: Aaron Wright with Morgan Stanley asked about US market growth vs brackets/wires and zero AA.

A: Joe talked about US market and zero AA ramping, and Aaron was told zero AA has excellent gross margin.

Q: Kevin Caliendo with UBS asked about resin cost percentage and guidance prudence.

A: John said resin cost is about 25% and guidance is a net of puts and takes.

Q: Michael Ricekin with Bank of America asked about ASP and US vs OUF channels.

A: Joe said ASP expectation is 1% - 2% decline, and DSOs are force multipliers in growth